Sprague-Dawley rats have produced abundant callus at 4, 7, 10,14, and 21 days following fracture of the lower tibia. Biochemical measurements demonstrate increased acid and alkaline phosphatase activity in the callus compared to normal metaphyseal bone (including cartilage and trabecular bone) when all results are corrected for DNA content of the tissues. Histochemically, the phosphatases are associated with bone, cartilage and fibroblasts of the callus. Invading cells, intermixed with surrounding muscle and connective tissue, contain more acid phosphatase activity than the sedentary cells of the formed callus. Alkaline phosphatase is associated with the rapid matrix synthesis which is occurring in the bone and cartilage of the callus. The formative stage is further characterized by the complete absence of osteoclasts. Electron microscopy of the cells involved in the fracture healing process is still in the preliminary stage. However, it is already apparent that the periosteal response to fracture, the invasion of new cells from the surrounding muscle and connective tissue, and the transformation of fibroblasts to chondrocytes, are phenomena which must be studied very early in the fracture healing process.